Industry analysis: How will the pandemic change the car world?

“The result of that was a total of 250 changes to processes that have been in place as long as 60-70 years here at the Crewe factory.

“For the first eight weeks or so after we came back, we were producing cars at half the [usual] rate [because of the social distancing required]. Demand was still there and parts were still there so, towards the middle of the summer, we took another look at the way we produce cars here and got production back up to nearly 100%.”

What kinds of trends were you seeing in the industry as the shutdowns started?

Felipe Munoz: “Those were shocking times. We started to see this impact in March, when we started to get the [car] sales information from China. In February, sales in China dropped by 78% [year on year] to just 200,000 units.

“Because 80% of the automotive supply chain is connected to China, whatever happens there is going to have a massive impact everywhere. But then in April, we confirmed this was going to be massive.

“April was the worst, because it was when the apocalypse hit. In India, for example, it was zero vehicles [sold]. It was a massive thing; we had never seen these drops.

“In the end, though, the global volume was down by 13%, which wasn’t as bad as we had thought.”

Are people keener to buy from stock or wait for new cars?

SR: “I don’t know if there’s a trend, but there is a pent-up demand now that showrooms are open again. I think a lot of dealers were on the ball with online sales, and that has been sped up in many cases. People were more attuned to buying online during the later lockdowns.”

WB: “There’s no such thing as a single customer: some want to be part of a process to commission a car, whereas others might want to walk into a showroom and drive out that afternoon. One interesting fact is that our global stock levels are at a historic low.”

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Who have been the biggest winners, and who appears to be on the front foot from the data that Jato is seeing?

FM: “The biggest winners are the Chinese OEMs. In China, the market didn’t fall that much, so they continued launching these cars but thinking globally; the next step of their revolution will be global expansion. They want to get to Europe and the US.

“The other winners were those who focused a lot on EVs. Last year, the [sales] volume increased by 39%, which is massive considering the [pandemic] problems. EVs finally took off in 2020, the worst year for the car industry.”

Was Bentley’s strategy for a carbon-neutral strategy on the radar pre-crisis or due to it?

WB: “Our Beyond 100 plan is our strategy to become end-to-end carbon neutral by 2030 and change from being the world’s largest producer of 12-cylinder petrol engines to producing none. This has been in place for months, so Covid didn’t change the plan itself, it just changed the logistics of announcing it.

“It was interesting to see the customer reaction, as around half have said they’re ready to look for an electrified Bentley. We’ve already introduced the plug-in hybrid Bentayga and demand for that was far above what we expected. We know that one in three Bentley owners have an electric vehicle somewhere in their garage.”

Do you think Bentley’s experiences threaten the just-in-time processes that we’ve all become used to?

WB: “Pre-Covid, we worked on a two-day schedule. In the lockdown, we pushed that up to 21 days, and we maintained it close to that towards Brexit. We’ve learned not to let it go right down to two days or go as high as 21 days but to have it in high single digits. [Parts storage] is less costly than if we had to stop production.”

Do you foresee a fundamental restructuring of the industry, or will it stay largely the same?

FM: “I still think we’re going to see big changes. This is just the beginning. The mergers and consolidation of the industry and the role of China are all going to be part of this new situation in which we will see fewer car makers. We will see more consolidation and more collaboration, especially when it comes to autonomous vehicle technology, and we will definitely see more Chinese cars. The Chinese are leading the electrification race, which is, in the end, a good thing for all consumers.